Last week, a report on the divide between retirement funds for CEOs and the rest of us shared a startling statistic: All together, the 100 largest CEO retirement assets are roughly equal to the retirement savings of 41 percent of U.S. families.
Yet the report, which was authored by the Institute for Policy Studies and the Center for Effective Government, also revealed another stunning figure. When you add up the 10 largest retirement funds held by white male CEOs, the total came to $1.4 billion. Doing the same tally for the 10 largest retirement funds held by female CEOs only came to $277 million. Meanwhile, the 10 largest accounts held by CEOs of color—male or female—was even lower, adding up to $196 million.
The expected rationale for the discrepancy would be that these women simply had shorter tenures and, therefore, smaller accumulated retirement funds. Perhaps they had jumped around more as they tried to climb the ladder, or even took time out of the workforce when they had children.
But that wasn't the case.
The average tenure for the 10 white men with the largest retirement assets was just over 22 years, while it was nearly 26 years on average for the women. (It was just over 24 years for the 10 minorities of either gender with the largest funds.)
"It’s not a story we went looking for—to tell a gender or race story," said Scott Klinger, director of revenue and spending policies at the Center for Effective Government and one of the report's co-authors. "It jumped out at us because it mirrors what’s going on with women and minorities in the rest of the population."
While the reasons behind the gap aren't clear, Klinger points to a few possible explanations. One is that several of the men may have received high levels of equity—which they chose to sock away in their tax-deferred compensation plan—due to family ties to the founder or the transformations they oversaw at their companies. Another is that the female CEOs, for whatever reason, may have chosen to defer less of their compensation into retirement accounts than their male peers did.
But the most likely explanation, Klinger said, is that this is another manifestation of the pay gap, and that the differing sizes of retirement assets are tied to the smaller amounts of money the women and minorities got paid during their careers.
Research has shown that female managers and executives get paid less than men who do the same job. And at the highest levels, that discrepancy mostly manifests itself in lower amounts of bonuses or stock incentives. And even if the 22 women who run America's largest corporations are now making, on average, more than their average male peer, their retirement assets reflect what they have accumulated over the course of their entire professional lives—and they may have earned relatively less along the way.
For instance, Bloomberg recently reported that female business school graduates start their post-MBA careers making slightly less than men, $98,000 compared with $105,000. Then after five to seven years, the gap widens, to $140,000 for women and $175,000 for men.
"We think probably the differences are the disparities in pay over the long course of their careers," Klinger said. "If you have more pay, you're likely to defer more."
With their retirement assets averaging nearly $28 million, he notes the female CEOs in question are hardly going to be suffering in retirement. Still, it's another reminder of the pay gap's persistence. "The thing that plagues women at all levels is also an issue for people in the corner office," Klinger said.